UK Law and Practice Contributed by: Tom Sprange KC, Andrea Stauber, Martina Antosova and Lucy Pearson, King & Spalding International LLP
the Secretary of State in order to obtain a call-in decision regarding the transaction. Principal Law Governing Sales or Mergers The Competition Act 1998 and the Enterprise Act 2002 are the major sources of competition law in the UK and govern mergers. The Competition Act 1998 prohibits companies from: • engaging in practices that distort, restrict or prevent competition in the market; and • abusing a dominant position in the market. The Enterprise Act 2002 builds upon the Com- petition Act 1998 and sets out the tests for when and how the government can intervene in merg- ers. Following the UK’s withdrawal from the EU, any mergers that began after 1 January 2021 require clearance from the UK’s Competition and Mar- kets Authority (CMA). The Digital Markets, Competition and Consum- ers Act 2024 introduced wide-ranging amend- ments to the UK competition and consumer law regimes – thereby expanding the powers of the CMA and significantly altering the merger control and antitrust investigation processes. The CMA was established under the Enterprise and Regulatory Reform Act 2013 and is the body in charge of competition regulation and enforce- ment in the UK. The CMA studies the function of competition in the UK’s energy market as a whole and can initiate targeted investigations based on its findings. Regulator and Approval Process Competition and Markets Authority
The CMA may commence a review of a merger on its own initiative or following a formal notifi- cation being made by the businesses. The CMA has a statutory deadline of 40 working days in which to complete the first phase (Phase 1) of its merger review process. If the CMA determines that the merger has a realistic prospect of sub- stantially decreasing competition, it will begin an in-depth assessment, which is generally limited to 24 weeks (Phase 2). Parties may offer to alter aspects of the transaction in order to mitigate any competition risks that were identified. Please see 2.4 Market Concentration Limits for details of the circumstances in which the CMA has the jurisdiction to examine a merger. Gas and Electricity Markets Authority The Gas and Electricity Markets Author- ity (GEMA), a panel of independent experts appointed by the Secretary of State, has concur- rent authority with the CMA on the application and enforcement of certain competition rules in the energy sector. Northern Ireland Authority for Utility Regulation The Northern Ireland Authority for Utility Regu- lation (NIAUR) is an independent government department that promotes effective competition in the market of Northern Ireland. It enforces the prohibitions in the Competition Act 1998 and can make market investigation references to the CMA under the Enterprise Act 2002. The NIAUR and the CMA work together under the terms of
a memorandum of understanding. 1.5 Central Planning Authorities
Ofgem regulates the electricity and downstream gas industries within Great Britain. Its powers are set out in the:
281 CHAMBERS.COM
Powered by FlippingBook